OIL & Gas UK chief executive Deirdre Michie has noted the success of efforts to cut costs in the North Sea amid the crude price plunge but recognised they have put severe pressure on the whole supply chain. In her keynote address to the trade body’s annual conference in Aberdeen today, Ms Michie will note the industry has halved the cost of producing oil and gas to around $15 per barrel oil equivalent from $30 over the last two years. The development costs of the projects that have been sanctioned recently averaged half of those approved in 2013 and are expected to fall further this year. She will add: “The sustainability of these improvements is always under scrutiny. We know that some of them have been achieved by tough rate reduction; job losses; retendering and, quite frankly, by putting severe pressure on the whole supply chain.”
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